BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
Petitioner, : INFORMAL DECISION
v. :
COLLECTION
DIVISION OF THE : Appeal No. 87-0893
STATE TAX
COMMISSION OF UTAH, ) Acct. No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
is an appeal to the Utah State Tax Commission from a decision of the Collection
Division of the Utah State Tax Commission (Respondent) to assess penalty and
interest on individual income tax account No. XXXXX for the tax year
XXXXX. An Informal Hearing was held on
XXXXX in the offices of the Utah State Tax Commission. David J. Angerhofer, Hearing Officer, heard
the matter for the Commission. XXXXX
represented the Petitioner. Respondent
assessed a penalty of $$$$$ and interest of $$$$$ as of XXXXX on a tax due of
$$$$$ for the tax year XXXXX.
Petitioner stated that the trust is a XXXXX trust with various assets
including a partnership interest in XXXXX.
Petitioner stated that it had filed Colorado returns and had not
realized that it had income from the state of Utah. This Utah income flows through the partnership which has a Utah
source. This partnership, of which
Petitioner is a limited partner, had previously been a corporation. Petitioner was not required to file a Utah
return at that time. When the
corporation liquidated and went into a limited partnership, Petitioner did not
distinguish between the corporation and the partnership and did not realize it
than had to pay taxes to Utah.
Petitioner stated that a penalty should not be applied pursuant to Utah
Code Ann. 59-13-27 (1953) because there was reasonable cause for the failure to
file and there was no willful neglect.
Petitioner requests a waiver of penalty.
FINDINGS
A
penalty is properly assessed if a taxpayer fails to timely make and file a
return unless "it is shown that the failure to file it was due to
reasonable cause and not due to willful neglect. . ." Utah Code Ann. 59-13-27 (1953). Pursuant to this section the failure to file
must be both due to reasonable cause and not due to willful neglect. The Commission finds that although there was
no willful neglect in this matter, the failure to file was not reasonable. Petitioner was negligent in failing to
apprise itself of its change in tax status once the corporation was liquidated
and Petitioner became a limited partner.
DECISION AND ORDER
It
is the Decision and Order of the Utah State Tax Commission that Petitioner's
request for waiver on individual income tax account No. XXXXX be denied.
DATED
this 10 day of September, 1987.
BY ORDER OF THE STATE TAX COMMISSION OF UTAH
R. H. Hansen G.
Blaine Davis